Introduction
• Iran has always been one of India’s main suppliers of oil, second only to Iraq and Saudi Arabia. India and Iran enjoyed bilateral relation right after independence with PM Nehru underscoring the historical ties between India and Iran as well as its people. While the ties suffered a blow after the Iranian revolution of 1979, they were revived by Narsimha Rao who visited the Islamic Republic in 1995

• Raja Mohan is correct in claiming that for ‘the Islamic Republic of Iran, it is the best of times and the worst of times.’ Iran’s regional influence has never been as expansive as it is today. Yet, there is a huge push back against Tehran from some of its Arab neighbours, Israel and the current US Administration. This has led to increasing internal and external economic and political volatility in Iran. Iran which was railing under decades of sanctions got a sigh of relief when under the Obama administration Joint Comprehensive Plan of Action came through

• The pulling out from the Joint Comprehensive Plan of Action (JCPOA), or the Iran nuclear deal, by US President Donald Trump had its implications felt on India which has been told along with other buyers to take oil imports to “zero” by the cut-off date of

• Heavily reliant on Iranian crude to fuel its fast-growing economy, India has been walking a diplomatic tightrope on the issue to balance its relations with Iran and US. Iran has also emerged as a potential regional power in the Middle East influencing events in a host of counters, including Iraq, Syria, Lebanon, Palestine, Bahrain and Yemen. The Shia-Sunni competition has taken the shape of tug of war between Iran and Saudi Arabia

Areas of Opportunities with Iran
• Within India’s diplomatic circles, Iran is seen as ‘gateway’ to Central Asia and Afghanistan
o President Rouhani’s visit to India which saw signing of 9 agreements showcases the potential of bilateral ties between the two states
• Connectivity is one of the most important avenues of cooperation
o Chabahar port emerged as one of the most significant aspects of bilateral talks
o India’s recent accession to the Ashgabat Agreement in which Turkmenistan, Iran, Uzbekistan and Oman (NSTC) are members and to the Trilateral Transport and Transit Corridor agreement involving India, Iran, and Afghanistan will help enhance its engagement with the region
• India has committed itself to increasing its oil off-take by 25% this year, as part of easing negotiations for the Farzad-B gas fields India is keen to buy a stake in
• India has also committed itself to investing $500 million to build berths at Chabahar’s Shahid Beheshti Port, and $2 billion to build a rail line through the Zahedan province to Afghanistan, in an effort to circumvent trade restrictions by Pakistan
• It was also was decided that India will set up ”plants in sectors such as fertilizers, petrochemicals and metallurgy in Chabahar Free Trade Zone (FTZ) on terms mutually beneficial to the concerned parties”
• People-to-People Contact: Both sides agreed to facilitate issuance of visas to promote tourism and people-to-people contacts between the two countries
• Economic: The Agreement on Avoidance of Double taxation was signed to promote bilateral trade and investment
• Politico-security: India and Iran also signed a Bilateral Extradition Treaty and it was also decided to have enhanced cooperation in the maritime domain
o The two countries “agreed to hold dialogue to look into measures for cooperation in defence sphere, including port calls by naval ships, training and regular exchanges of defence delegations
• There is also cooperation to tackle violent elements especially in Iraq and Afghanistan. This is largely due to the ongoing politico-security crisis, particularly in the Middle East, Afghanistan, and South Asia, where terror groups such as ISIS have penetrated in different forms—physical and ideological. For the first time after lifting the sanctions, both the navies conducted exercises in early June 2016 in the Strait of Hormuz
• Cultural factors: The Indian subcontinent borders Iran, which shared a defacto common frontier in pre-independence India with connections spanning thousands of years between the two ancient civilisations
o The Persian influence — particularly on the language (Urdu and Hindustani) and the architecture (from Lahore to Agra) — in Mughal period India are strong, tangible remnants of those ties
o Even prior to that, circa eighth century, the migration of the Zoroastrian people fleeing from persecution to western India, made India the permanent home to the world’s largest such community — the Parsis.

Challenges in the relationship
• Withdrawal of the US from P5+1
• Other Arab countries such as Saudi, Oman etc. view Iran as a hegemonic power than a friendly neighbor
• Furthermore, Tehran’s missile programme has often been viewed and analysed within the exclusive content of Iran-Israel rivalry
• Diplomacy with Iran itself is an art of its own. Much of Tehran’s approach to international diplomacy is based on survivability
o Sanctions, economic blockades, covert wars, and a race for regional supremacy more often makes Iran a difficult partner
• Political issues: Iran’s Supreme Leader Ayatollah Khamenei brought up the issue of Kashmir, including Kashmiris along with Muslims in Yemen and Bahrain as among those being oppressed by tyranny. The reasons behind the timing of this event could be many, from India’s growing closeness with both Israel and Saudi Arabia to the Ayatollah offering a narrative for a domestic audience
o Protests against the Iranian government’s conservatism, as women took on laws requiring them to wear a veil

Way Forward
Geo-strategic reality will ensure Iran’s continued importance. But the renewal of American hostility provides India an opportunity to evaluate the strengths and weaknesses of Indo-Iranian relations.